No Left Turns

The Constitution from 30,000 Feet

Jeffrey Rosen has a nice bit of sophistry in The New Republic. He suggests, perhaps correctly, that Justices Kennedy and Roberts, were asking the government to point to a limiting principle--something which would allow Obamacare, but would nonetheless not allow the federal government legal authority to do whatever it wanted. Unfortunately, he says:

[Soliciter Genera] Verrilli's error was substantive: He failed squarely to answer Roberts and Kennedy's repeated questions about what limits he envisioned to Congress's power to regulate interstate commerce. Verrilli's evasions weren't only unhelpful--they were also unnecessary.

Rosen suggests that there is an obvious limiting principle, one that can be discovered in the founding. "In previous cases denying Congress the power to regulate local activities such as guns in schools or violence against women," he notes, "the Court has drawn a distinction between activity that is truly local and activity that is truly national."

More generally, he quotes a new book by Neil S. Siegel suggesting that the federal government was designed to address any problem that was not local in nature:

"The Commerce Clause is best understood in light of the collective action problems that the nation faced under the Articles of Confederation, when Congress lacked the power to regulate interstate commerce." Siegel argues that "to over-come failures to participate in collective action whose effects spill across state borders, the clauses of Article I, Section 8 authorize Congress to require various kinds of private action."

Balderdash! If that was the meaning of the commerce clause, it would not say: "The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

Rosen's argumen views the Constitution from 30,000 feet. Its particular details fade into nothingness and it becomes a plenary grant to address any issue that Rosen thinks is a national one.

Consider some constitutional arguments of the founding era. In that era, we should note, it was an open question whether the federal government had the authority to build roads, canals, and other such projects. President Madison thought it might be, but in the end, he decided that such projects required an amendment, which he supported. Whigs disagreed with that. But if internal improvements were constitutionally controversial, it is hard to claim that there would have been any discussion of whether the federal goverment may regulate my visit to my doctor.

In his Opinion on the Constitutionality of the Bank, Hamilton said that Congress may create a corporation to fulfil the powers listed in Article 1, section 8. Among those he listed was the commerce clause. After all, creating and managing a national circulating medium is a national act, by definition. The key question between Hamilton and Jefferson turned on whether Hamilton was correct to infer a power to create a corporation in the service of the enumerated powers. It was self-evident that the object was national in scope.

But Hamilton noted that there were very real limits:

The only question must be in this, as in every other case, whether the mean to be employed or in this instance, the corporation to be erected, has a natural relation to any of the acknowledged objects or lawful ends of the government. Thus a corporation may not be erected by Congress for superintending the police of the city of Philadelphia, because they are not authorized to regulate the police of that city

The federal government, even Hamilton, the man with the most expansive understanding of federal power at the time, argued, did not have a general police power. And what is the police power, classically speaking, the power to regulate health, safety, and morals and other such things. But Rosen wants to say that, under modern conditions, my visit to my doctor is a national concern. Ha! To be sure, my doctor may buy products that are shipped interstate. And if the federal government allowed it, it might be possible to buy heath insurance across state lines (that would be nice). In those cases there would be interstate commerce. By my visit to my doctor is hardly interstate commerce--unless we allow, as Rosen implies, that there is no such thing as intra-state commerce.

And that brings us to another celebrated case--Gibbons v. Ogden. That case involved the grant, by the State of New York, of a monopoly of shipping on the Hudson river. The Court ruled, not unreasonably, that the Hudson is not an intra-state waterway. ItJus has borders on New York and New Jersey, and it ends at the Atlantic Ocean. Hence such a monopoly grant was illegal.

This case matters because people on the Left often cite Justice Marshall's opinion to justfy an expansive reading of federal power. Justice Sotomayor quoted it from the bench this week. But we need to keep in mind that the case involved shipping on a waterway that borders on more than one state, and that ends at the ocean. We should also read more closely what Marshall actually said:

Comprehensive as the word "among" is, it may very properly be restricted to that commerce which concerns more States than one. The phrase is not one which would probably have been selected to indicate the completely interior traffic of a State, because it is not an apt phrase for that purpose, and the enumeration of the particular classes of commerce to which the power was to be extended would not have been made had the intention been to extend the power to every description.

A clause that grants the federal government power regarding commerce among the states necessarily implies that there is such a thing as commerce that is local--the very thing that Rosen says does not exist. To be sure, he points to "previous cases denying Congress the power to regulate local activities such as guns in schools or violence against women." But close observers will note that those are not commercial activities at all. If my visit to my doctor is interstate commerce, then there is no commerce that is not interstate.

If that is what the people want, there is a simple remedy, one consistent with the constitution. Amendment. But somehow the amendment clause falls by the wayside in pursuit of the public good.

Rosen's argument is that under current circumstances the health care market is national. H quotes a Representative from Massachusetts:

A national mandate would free Massachusettes[sic] from being "forced to subsidize through higher premiums and higher Medicare and Medicaid costs the uncompensated care of people in other states who do not have health insurance."

But others might reply that Rosen is attacking the notion that the states in our federal system are laboratories of democracy. They will have diverse laws, and many different approaches to health care policy. He suggests that a state that passes a policy may not suffer from competition with other states. In other words, he presumes what he is concluding--that health care is naturally a national market.

And that brings us to a point that Walter Russell Mead makes eloquently. America's health care system is simply too large and complex to be regulated by a bureaucracy in Washington that creates a uniform set of rules for a country as large and diverse as the United States. Even by his own living constitution model, therefore, Rosen's argument fails.

Discussions - 2 Comments

That is a more interesting argument. Rhetorically of course Hamilton,was the man with the most expansive understanding of federal power at the time. (From 30k feet)

But it was Jefferson who launched the embargo.

"And if the federal government allowed it, it might be possible to buy heath insurance across state lines (that would be nice)."

Why would an insurance company be willing to sell you health insurance at Indiana prices if you live in Ohio? (I don't know, but I suspect that there are some material differences between those states).

If the federal government allowed it, and even if it did not, it might be possible to buy drugs across "State" lines. (Canadian prices would be nice).

Also it seems to me that the distinction between interstate commerce and intrastate commerce is somewhat shaky, the more you zoom in, or zoom out.

Intrastate commerce can be conceived as that commerce which is reserved to the states under the 9th and 10th ammendments. i.e. it belongs to a different jursidiction.

Likewise Global commerce which stands above interstate commerce can have an impact upon interstate commerce.

So the intrastate commerce activities of a Canada, which set certain profit margins on patented medicines, certainly come back to influence interstate commerce in the United States.

In fact due to the internet drugs made for the Canadian market end up back in the U.S. You can hire more border patrol and more FTC agents...but it is something of a loosing battle.

As an economic proposition, I would actually have some basis for concluding that Healthcare is an international market.

Basically Canada and Germany can have a cheaper and better single payer system in part because they abuse intrastate advantages.

I would speculate that Insurance generally is somewhat of a global market. Yet the price points depend to a large extent upon the law in localized intrastate jurisdictions.

1)The world is flat.
2) All commerce is global.
3) Sophisticated rich people could prove subtle market distinctions, but then the intellectual property would enter into the public domain.

Some of the most valuable information has to do with just how different intrastate, interstate and global regulations shape markets. I think what Rosen might be saying is that all markets are shaped by rules or laws.

"America's health care system is simply too large and complex to be regulated by a bureaucracy in Washington that creates a uniform set of rules for a country as large and diverse as the United States."

Agreed, but as a matter of fact it is not regulated by a bureaucracy in Washington alone, but by state level bureaucracy's and on an international level by bureaucracies and jurisdictions which set forth a tapestry of policies. So the laboratory of democracy is also international vis. a vis healthcare costs.

What Rossen might be argueing against is the narrow minded notion of localized intrastate commerce. The U.S. will not actually contain heathcare costs until it quits subsidizing the world via pharmaceuticals.

That is Canada is the prime example of a free rider on America's health Care system. Markets are not pre-political, certainly not markets that involve such levels of "trademark", i.e. brand names and "patent", i.e. monopolies for the recuperation of R&D.

We know that healthcare is properly a national market, because in point of fact it is an international market.

The wheat market was global in the 18 century, but no one thought that the federal government had the right to regulate the price of wheat, or to regulate how wheat was grown or stored, etc. The claim that something has a national or international market is insufficient to justify the claim that the people have empowered the federal government to make law for that market.

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